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Happy Holidays from Comcast: Your Bill is Going Up!

Phillip Dampier November 27, 2018 Comcast/Xfinity, Consumer News 4 Comments

Comcast’s Cyber Monday promotions failed to include in its advertised prices up to $31.25 in monthly surcharges.

Comcast will use two mandatory surcharges to hike cable TV customers’ rates on Jan. 1, including those on promotional or fixed contract pricing, while also raising the optional modem rental fee to a record $13 a month — a new industry high.

  • Broadcast TV Surcharge (varies per market) will increase to $10.00 a month.
  • Regional Sports Network Fee (varies per market) will increase to $8.25 a month.
  • Most customers will see an increase of about $3.75 a month for cable television.
  • The modem rental fee, shown on the bill as “Internet/Voice Equipment Rental” will increase $2, to $13 a month.

Cord Cutters News first reported the rate increases. Ars Technica noted Comcast raised the broadcast TV fee from $6.50 to $8 and the sports fee from $4.50 to $6.50 about one year ago, making these two mandatory surcharges a lucrative source for extra revenue. Comcast does not waive these fees (or future increases) for its cable TV customers, even those on new customer promotions. The company boosted modem rental fees $1 a month in 2017. Now it wants an extra $2, but customers can easily avoid that fee by buying their own cable modem, which will quickly pay for itself.

Comcast typically raises rates in different cities over the course of a year, so only some customers will experience the rate increase on Jan. 1, but by the end of 2019, all Comcast customers will see a higher bill.

The use of surcharges to implement hidden rate increases is controversial. Comcast and other cable companies can and do advertise their services without including increasingly steep surcharges and fees, which can dramatically raise the bill far beyond what companies advertise.

A typical Comcast customer offered a 2018 Cyber Monday bundle of television and internet, advertised for as little as $49.99 a month, would pay an additional $31.25 a month in surcharges, not including an additional outlet service fee if a customer wants to watch on one more than television set.

Currently there are 4 comments on this Article:

  1. Dylan says:

    Happy Holidays!

  2. Josh says:

    Geez….$18.25 on top of the already outlandish price.

    I remember when cable was $16 period in the 90s, before deregulation gave…the same thing for $200 🙄

  3. Ray Pichulo says:

    I have been a Comcast subscriber for 11 years, 5 as an “Earthlink powered by Comcast” subscriber and for the last 3 years plus as a residential Triple Play subscriber since I moved. As an Earthlink customer we enjoyed Comcast’s Internet service both from a performance standpoint as well as cost. Since our move, however, our satisfaction level has steadily deteriorated. We just received our first bill of 2019 and received a rude shock when we discovered that our monthly rate had been increased by $73,13 from $168.52 to $241.65, or 2,998.80 a year. Yet , for the additional $73 a month, we get no improvements nor additional services . I’ve done some homework to see if I could find a legitimate reason for these increases. Far from finding that your company is beset with declining revenues or increasing expenses , I found quite the opposite.
    • Let’s not forget the Tax Cuts and Jobs Act of 2017, which took effect last year. It changed the top corporate tax rate from 35% to one flat rate of 21%. This rate is a permanent change and is effective for corporations whose tax year begins after January 1, 2018.
    • You have increased this year’s stock dividend payment by 21%.
    • Your board of directors have authorized $7 billion for buyback of your common stock, $5 billion of which has already been exercised.
    • According to CEO Brian Roberts’ comments in the conference call transcript of Comcast’s most recent earnings statement (Q4,2018) your company recorded a $5.4 billion dollar reduction in cable expenditures last year and realized a 15.6% cash flow increase from cost reductions and subscriber growth. His remarks are shown in the excerpt below:
    “Cable’s EBITDA growth of 7.6% was the fastest in six years, and net cash flow increased by 15.6%, the third consecutive quarter of double-digit growth. This impressive financial performance reflects the pivot we’ve made to our connectivity businesses, which have higher margins and lower capital intensity.
    In addition, we surpassed 30 million customer relationships, as year-over-year growth accelerated to over 3%. Customer relationship net adds of 288,000 were driven by 363,000 net new broadband customers, the best third quarter in 10 years. Collectively, residential broadband and Business Services revenue increased by nearly 10%.”
    —–End of CEO Roberts’ comment————
    I found the following excerpt, also from the same transcript, very interesting, too
    Michael Cavanagh stated:
    “Cable capital expenditures in the quarter decreased by 5.7% to $1.9 billion, primarily reflecting lower spending on customer premise equipment, as X1 is now deployed to nearly 65% of our residential video customers. On a year-to-date basis, Cable capital expenditures decreased by 6.9% to $5.4 billion, as declines in customer premise equipment spending were partially offset by increased investment in line extensions and scalable infrastructure, consistent with the broader shift in our business towards connectivity.
    Cable CapEx intensity was 14.1% in the third quarter and 13.2% year to date. We expect capital expenditure intensity to increase sequentially in the fourth quarter, following typical seasonal patterns. However, for the full year, we now expect the reduction in capital expenditure intensity to be towards the high end of our guidance of 50 to 100 basis points.
    Wrapping up Cable, strong EBITDA growth and margin expansion together with declining capital expenditures resulted in net cash flow growth of 15.6% in the quarter and 14.8% year to date, underscoring the attractiveness of our connectivity-driven growth model.”
    —–End of Mr. Cavanagh’s statement——–
    Considering everything I’ve already noted and especially Mr. Cavanagh’s statement just above, could you please explain Comcast’s rationale for this 40+% rate increase.

    Thank you.

  4. Ray Pichulo says:

    I sent the previous post to Comcast’s executive offices and in an answer to it, all of the financial information I had info I had included was completely ignored as if it didn’t exist. Instead the main portion of the reply blamed the content providers and they just cavalierly stated that the other rates had increased as if raising the rates was their birthright.

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